Asset Finance

Asset Finance

Direct Commercial Finance offer a multitude of products, from basic Hire purchase to structured finance lease options, available with VAT deferrals, seasonal payments, and balloon payments. There are 3 options listed below to consider when financing an asset, please get in touch (tab) to discuss in more depth, no obligation with one of our dedicated brokers.

Hire Purchase

Hire Purchase is the most common type of financing. It simply gives you the benefits of ownership without the capital outlay. You pay a deposit and then pay set monthly repayments over a period that suits your needs. Interest charges are allowable against tax and you can reclaim the VAT at the start of the agreement. The vehicle is an asset on your balance sheet and you’re the owner once the repayments have been made in full.

Key Features:
  • low capital outlay. Generally, the VAT is paid upfront along with a percentage. Although in certain cases, the VAT can be deferred for up to 3 months and we can do 0%. There are also balloon payments available, based on the value of the asset at the end of the agreement.
  • Fixed repayments, the amount you pay will always stay the same. Seasonal payments are available for those business that rely heavily on certain months of the year, such as farmers who’s cashflow is greater through the summer months.
  • You own the asset. It appears on your balance sheet which gives you the same tax advantages as purchasing outright.
  • Generally the choice for smaller purchases and companies with a good cash position.

Finance Lease

A Finance Lease is another great option for companies to acquire new assets without the outlay. The main differences are that you don’t own the asset at the end, and there is VAT charged on each payment. You can offset the lease of your rentals against the taxable profits when you choose a finance lease. At the end of the agreement, you can continue to use the asset and pay a secondary rental or you can sell the asset and keep the majority of proceeds (generally 95%).

Key Features:
  • Minimal Capital outlay.
  • Fixed payments
  • Optional extension for a small amount
  • Upon sale you keep the majority of proceeds
  • VAT collected on each rental, rather than paid upfront.
  • Generally favoured by new starts or when there is a need to conserve cashflow


Refinancing is essentially selling your asset to the bank, allowing you to do one of two things. Firstly, you can refinance existing agreements. Depending on your equity position on the asset (how much its worth vs how much you owe), you can generally pull out some funds and get the repayments lower over the remaining (or extended) term. Alternatively, if you are looking to increase your cash position and you have unencumbered assets, we can finance them for up to 95% of their current value

Key Features:
  • Boosts cash position.
  • Cheaper rates than doing an unsecured loan as its asset backed.
  • you can refinance to extend the term of the agreement or lower the rate of interest.

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